All of the following are advantages of the NPV/payback approach to risk analysis EXCEPT it ______.
A) is easy and inexpensive to apply
B) considers a project's liquidity
C) explicitly considers the variability of a project's return
D) is consistent with the notion that risk increases with futurity

Question

Quizplus · Accepted Answer

The NPV/payback approach does not explicitly consider the variability of a project's return. It focuses on the time it takes to recover the initial investment (payback period) and the present value of cash flows (NPV), without directly addressing the potential variability or volatility of those returns.

All of the Following Are Advantages of the NPV/payback Approach